Asset Based Lending is committed to helping our borrowers reach their financial goals through smart real estate investments, so our expert team has decided to highlight markets with exciting money-making potential. Each month we will do a deep dive into a real estate market that can benefit a real estate investor looking to fix and flip, start new construction, or embark on some other form of real estate investing. This month’s market is Philadelphia, one of the largest metro areas in the nation that has experienced half a decade of real estate market growth with numbers that will make any serious investor excited.
The Rise Of Real Estate Investing In Philadelphia By The Numbers
With the massive real estate shakeup in the New York metro area in 2020, both renters and homeowners are looking at other rising metro areas with urban and suburban options for living. The Philadelphia metro area has been expanding for years but has recently become a hot bed for growth, becoming the sixth largest real estate market in the nation and housing over six million people.
Since 2015 the average house price in Philadelphia has skyrocketed by over 41%, rising from $133,000 to $187,772 with increases slated for the sixth year in a row. The real investment magic of the area is the lack of available inventory- the city of Philadelphia has seen a nearly 20% decrease in home sale inventory in 2020 compared to the previous year. Meanwhile, the active housing inventory in Bucks County PA is a staggering 50% lower in 2020 than the previous year. This lack of inventory with increasing demand is creating a hot seller’s market for real estate investors.
Philadelphia Statistics
- Median home sale price: $240,000
- Median days on market: 34
(20.6% YoY growth) - Homes sold over list price: 25%
Bucks County Statistics
- Median home sale price: $375,000
(15% YoY growth) - Homes sold: 860
(27% YoY growth ) - Median days on market: 24
Chester County Statistics
- Homes sold: 802
(32% YoY growth) - Median days on market: 33
- Homes sold over list price: 25%
Lehigh County Statistics
- Median sale price: $235,000
(18% YoY growth) - Homes sold: 456
(27% YoY growth ) - Median days on market: 8
According to Redfin, Bucks County PA has seen a 15% increase in average home prices since September of 2019 and with only an average of 24 days on market. The rising average prices and quick sales allow fix and flip investors to move quickly and capture increase their value-add potential. Additionally, the average price per square foot is currently $187, up 10% from 2019.
Nearby counties are doing almost as well, with Chester County PA boasting a nearly 10% increase in average from prices from the previous year and Philadelphia seeing growth of nearly $200 per square foot. The metro area has an even split of homeowners and renters, meaning starting a rental portfolio in the area could also benefit long-term investors.
Flipping Houses In The Philadelphia Metro
Looking and fix and flips in the counties surrounding Philadelphia, Lehigh County seems very promising. Currently in Lehigh County the median sale price for homes is $235,000, which is experiencing an 18% year over year growth. The average home price is a reasonable entry point for fix and flip investors and the constant increase in average sale price makes it even more attractive, but the best news is the average number of days homes spend on market: 8 days! Having the ability to close sales quickly and chain together profitable deals is what makes fix and flip investing such a great option.
The nearby area of Northampton County is also a good option for fix and flips, boasting the same incredible 8 average days on market, but with a bit higher average home price of $242,000 with a 12% annual growth. Depending on the property you find, Northampton County fix and flips can be an incredible investment.
Our team recently funded a repeat borrower for a fix and flip in Bucks County PA. The 1344 square foot property was purchased for $130,000 with a renovation budget of $110,000, so we offered a loan of $204,000 (85% LTC). The scope of work for renovations gave this property an estimated ARV of $320,000. This is just one example of the kinds of deals currently being found in Bucks County PA and the rest of the Philadelphia metro area.
Asset Based Lending is proud to provide multiple hard money loan options for real estate investors- including fix and flip loans, new construction loans, and rental loans. With over a decade of success and a team of dedicated experts, ABL is ready to help you reach your financial goals. Our team are experts in the markets we lend in, and we recognize that the Philadelphia metro area is brimming with excellent real estate investments. If you’re a real estate investor looking for reliable hard money loans in Philadelphia and the surrounding metro area, contact us today.